News Summary
The Knoxville housing market shows signs of stabilization, according to the recent State of Housing report. Despite a slight increase in home prices and an uptick in listings, affordability remains a significant challenge for many residents. As new residents influx into the area, homebuilders are striving to meet demand, while existing homeowners hesitate to sell due to high mortgage rates. The rental market is also competitive, highlighting ongoing affordability issues. With predictions of population growth, addressing these challenges is crucial for maintaining quality of life in Knoxville.
Knoxville is experiencing a stabilization in its housing market, according to the 2025 State of Housing report from East Tennessee REALTORS®. After several years characterized by sharply rising home prices, challenges brought on by the pandemic, and extremely limited inventory, the area is now seeing signs of improvement in housing supply. However, affordability remains a pressing issue for many residents.
As of 2025, housing prices remain elevated, with the median home price in Knoxville rising from approximately $351,000 to $366,000, which is an increase of 4.3%. Despite this increase, the number of homes listed for sale has grown by 12.7% compared to the same period last year, offering cautious optimism to prospective buyers. Furthermore, the number of homes under contract has surged by 3.5%, indicating a positive trend for future closings. Yet, there is an undeniable concern as the number of sold properties has decreased by 2.5% year-over-year, primarily influenced by sluggish market activity in the early months of the year.
The dynamics of the rental market in Knoxville are similarly complex. With an analysis showing ten rental applications for every available apartment, the city boasts one of the most competitive rental markets in Tennessee and ranks as the third toughest in the South. Several factors have compounded these challenges, including an upsurge in student enrollment at the University of Tennessee, though such details were not specifically elaborated upon in the report.
Meanwhile, homebuilders in the region are striving to meet the growing demand for housing due to an influx of new residents. Despite these efforts, existing homeowners are hesitant to sell their properties, largely due to high mortgage rates. This reluctance contributes to stagnant growth in the market overall.
In terms of time on the market, homes are now taking 46.5% longer to sell compared to the first quarter of 2024. This extended timeframe indicates a cooling off period for the housing market, which has led to questions about how these trends might affect overall economic stability in the area.
Affordability challenges continue to plague both renters and buyers, with many faces historic cost burdens. Local officials have expressed ongoing concerns about the balance between growth and the impact on community services as Knox County anticipates an additional 80,000 residents by 2045. Addressing this expected growth will be crucial for maintaining the quality of life in the area, as residents voice apprehension regarding the implications for traffic and infrastructure.
Even with a slight rise in housing inventory, the overall U.S. market is also feeling the strain, with the inventory of unsold new homes reaching 9.8 months of supply. This figure is approaching levels reminiscent of past housing market crashes, raising alarms about the sustainability of market conditions moving forward. Future trends in mortgage rates later in the year could play a significant role in this evolving housing landscape.
In summary, while Knoxville’s housing market shows signs of stabilization, significant affordability concerns linger for both homebuyers and renters. The response to these challenges will shape not only the housing market itself but the broader community and its services in the years to come.
Deeper Dive: News & Info About This Topic
HERE Resources
UTC Board Approves Tuition Increase for In-State Students
California Takes Action to Address Housing Shortage
Knoxville City Council Proposes Sales Tax Increase for Vote
Navigating Knoxville’s Housing Affordability Crisis: A Balanced Perspective
Knoxville Offers Free Fall Risk Assessment Clinics for Seniors
Mayor Kincannon Advocates for Sales Tax Increase in Knoxville
Zohran Mamdani’s Historic Victory Shakes Up NYC Politics
Chattanooga Sees Population Surge and Development Initiatives
KAT Krawl Engages Knoxville Residents on Public Transit
Thousands Rally Against GOP Proposal to Sell Federal Lands
Additional Resources
- Inside of Knoxville: Housing Report 2025
- WBIR: Supply and Demand in East Tennessee Market
- WATE: East Tennessee Housing Market Report
- Stacker: Fastest Growing Home Prices in Tennessee
- Norada Real Estate: Knoxville Market Overview
- Wikipedia: Housing Market
- Google Search: Knoxville housing market
- Google Scholar: Knoxville housing affordability
- Encyclopedia Britannica: Housing
- Google News: Knoxville housing
Author: STAFF HERE KNOXVILLE WRITER
KNOXVILLE STAFF WRITER The KNOXVILLE STAFF WRITER represents the experienced team at HEREKnoxville.com, your go-to source for actionable local news and information in Knoxville, Knox County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Dogwood Arts Festival, Big Ears Festival, and Knoxville Asian Festival. Our coverage extends to key organizations like the Knoxville Area Chamber Partnership and United Way of Greater Knoxville, plus leading businesses in healthcare, education, and energy that power the local economy such as Covenant Health, University of Tennessee, and Tennessee Valley Authority. As part of the broader HERE network, including HEREBristol.com, HEREChattanooga.com, HEREMemphis.com, and HERENashville.com, we provide comprehensive, credible insights into Tennessee's dynamic landscape.
